P r es en t a t i o n t o I n v es t o r s & A n a l y s t s – 2 0 1 9 F u l l Y ea r R es u l t s 1
Outline • The Operating Environment • Wema Bank Overview • FY 2019 Performance Review • 2020 Outlook and Strategy • Appendix www.wemabank.com P r es en t a t i o n t o I n v es t o r s & A n a l y s t s – 2 0 1 9 F u l l Y ea r R es u l t s 2
OPERATING EN ENVI VIRONMENT RONMENT www.wemabank.com www.wemabank.com P r es en t a t i o n t o I n v es t o r s & A n a l y s t s – 2 0 1 9 F u l l Y ea r R es u l t s 3
Operating Environment Geopolitics and continued civil unrest riled up the global and domestic economy... Global Environment Domestic Environment Oil Price, Foreign Reserve and Borrowings • America’s protectionist stance has continued to • 2019 started with a slight decline in growth as the Q1 • Oil price started the year with an upward trend, impose uncertainty on global markets. The ongoing GDP closed at 2.01% from 2.38% recorded in the finishing the first quarter with oil prices at $68.39. This U.S.-China trade war has been temporarily halted by preceding quarter (Q4 2018). Q3 GDP showed signs of trend further continued with the start of the second the signing of the phase one deal. This stopped the improvement albeit a sluggish growth as the quarter quarter recording its highest value in price at $74.57 in imposing of 3rd round sanctions by the two nations. recorded a GDP figure of 2.28% which is still well below April, H1 ended at $66.55. Subsequent periods had a the 6% GDP growth mark required for significant growth swing in prices with the attack on the Saudi Aramco by • Pre and post Brexit, the EU continues to face in the economy. unmarked droned spiking oil prices in September to significant recession risks which will definitely be $69.02. Oil prices ended the year at $68.44. heightened once the UK exits. Interest rates to remain • Elections and post-election petitions affected policy low and yield curves to remain flat for several years making. However with majority of the petitions • Foreign reserves fell below the $40bn benchmark going forward concluded, the government formed its cabinet, which have heightened fears of devaluation of the economic advisory committee and had the 2020 budget Naira. • China’s economy continues to weaken with the passed in December. attendant impact on commodities prices across the • Fears of a fiscal deficit resulted in the government world especially demand for crude oil. GDP growth • Inflation started the year in a continued downward trend reviewing the nations income lines, hence, the new tax rate was 6% in Q4, 2019 which is the lowest rate since from last year closing the first quarter at 11.25%. Q2 bill, and VAT increase 1992. however witnessed a tick in April and May, the quarter however ended on a low at 11.22%. The end of Q3 and subsequently Q4 saw inflation commence an upward trend. Q3 ended with inflation at 11.24% and Q4 ended the year at a high of 11.98%. P r es en t a t i o n t o I n v es t o r s & A n a l y s t s – 2 0 1 9 F u l l Y ea r R es u l t s 4
Policy Environment Incoherent policies stagnating growth P r es en t a t i o n t o I n v es t o r s & A n a l y s t s – 2 0 1 9 F u l l Y ea r R es u l t s 5
OVERVIEW OF TH THE E BAN ANK www.wemabank.com P r es en t a t i o n t o I n v es t o r s & A n a l y s t s – 2 0 1 9 F u l l Y ea r R es u l t s 6
Overview of the Bank OWNERSHIP Over N716bn in N94.89bn 350,000 Most Innovative Bank, Africa Total Assets Shareholders in Total Earnings Listings By World Finance (32.65%) OPERATIONS & CONTACT CHANNELS 44% 56% 382 2.42m 157 3,186 1,172 7,156 Accounts ATMs Branches Professional Staff Agency Banking POS Partners GOVERNANCE Bbb- (Stable) Board Members: 11 Bbb- (Stable) Non- Executives: 7 Executives: 4 Bbb- (Stable) Sustainability Partnerships P r es en t a t i o n t o I n v es t o r s & A n a l y s t s – 2 0 1 9 F u l l Y ea r R es u l t s 7
FULL DIGITAL BANK ALAT continues on the path of positive growth Accounts 408,339+ Opened Transactions 10,998,690 Executed Worth Average of ~ N1,000 Average of N15k in Average of ~N380k in 298,047 active in 10,982 active 110,291 active ALAT N232bn ALATLite accounts goals accounts 190,228 Savings Goals Created 34,780 Goal Based Loans $2,020,995+ N3.4bn Transaction value 24 Awards Number of Cards 144,167 3,398 active Virtual Cards Worth of loans 35,701 Transactions done Issued and counting disbursed P r es en t a t i o n t o I n v es t o r s & A n a l y s t s – 2 0 1 9 F u l l Y ea r R es u l t s 8
DEVELOPING NEW CAPABILITIES We have offered a robust platform for SMEs; Gaming & Entertainment 2 1 3 Partnerships ALAT for Business OUTLET by ALAT P r es en t a t i o n t o I n v es t o r s & A n a l y s t s – 2 0 1 9 F u l l Y ea r R es u l t s 9
P r es en t a t i o n t o I n v es t o r s & A n a l y s t s – 2 0 1 9 F u l l Y ea r R es u l t s 10
FY 2019 PE PERFORMANCE FORMANCE REV EVIEW IEW www.wemabank.com www.wemabank.com P r es en t a t i o n t o I n v es t o r s & A n a l y s t s – 2 0 1 9 F u l l Y ea r R es u l t s 11
20 2019 19 Financ ncial ial Year Highl ghlig ights hts FY’2019 FY’2018 FY’2017 Earnings, Profit, Capital. Gross earnings N94.89bn N71.53bn N65.27bn PBT N6.76bn N4.80bn N3.01bn PAT N5.20bn N3.33bn N2.26bn CAR 13.60% 18.01% 14.32% EPS 13.50K 8.6k 5.8k Deposits N577.28bn N369.20bn N254.46bn Revenue nue Generat ation Loans (Net) N289.24bn N252.20bn N215.84bn Interest income N70.68bn N57.63bn N53.07bn Non-interest income N24.21bn N13.89bn N12.19bn Cost-to-income 84.66% 87.16% 89.90% Operating ting Effic ficienc ncy Yield on Asset 16.47% 17.75% 17.76% Operating expenses N37.30bn N32.58bn N26.77bn Net interest margin 6.04% 7.08% 6.61% Margin n & Ass sset ROAE (annualised) 12.26% 9.43% 4.60% Qual ality ty ROAA (annualised) 1.02% 1.09% 0.56% NPL (%) 7.38% 4.98% 3.52% Loan to deposits 48.61% 68.31% 84.82% Interest Coverage ratio 212.0% 233.0% 196.0% Liquidity ratio 32.37% 32.05% 26.25% P r es en t a t i o n t o I n v es t o r s & A n a l y s t s – 2 0 1 9 F u l l Y ea r R es u l t s 12
2019 Financial Year Highlights Improved performance YoY Gross Earnings Grew by 32.65% YoY to N94.89billion from N71.53billion in FY 2018 driven by an increase of 22.64% and 74.24% in Interest Income and Non-Interest Income respectively. Total Deposit N94.89bn Increased by 56.36% YTD to N577.28bn from N369.20bn in 2018 FY. 32.65% YoY Profit before Tax (PBT) 56.35% YoY growth to N6.76billion from N4.80billion in FY 2018. Total Loans and Advances 40.83% Closed at N289.24bn an increase of 14.69% when compared to FY 2018 (N252.19bn) Operating Expenses 14.69% Increased from N32.58bn in FY 2018 to N37.30bn in FY 2019, as the bank continued to attract and retain quality members of staff amidst rising statutory fees. Total Assets 14.50% Increased by 46.50% to N715.87bn (N488.80 in FY 2018). 46.45% P r es en t a t i o n t o I n v es t o r s & A n a l y s t s – 2 0 1 9 F u l l Y ea r R es u l t s 13
Earnings Trend Improved performance YoY Gross Earnings Comment ( N’bn ) 94.89 71.53 65.27 • Gross Earning grew 32.65% to N94.89billion in the period (FY’ 18 54.25 N71.53billion), driven by 22.64% growth in interest income and a 45.79 74.24% increase in non-interest income • Interest Income up by 22.64% (from N57.63billion in FY’ 18 to N70.68billion in FY’ 19), drivers include: FY'15 FY'16 FY'17 FY'18 FY'19 ✓ Investment Securities up by 35.34% y/y (N7.20billion in FY'19; N5.32billion in FY’ 18). Interest Income ( N’bn ) 70.68 ✓ Interest on Loans and Advances up by 21.23% y/y ( N 61.84billion 7.18 57.63 in FY'19; N 51.01billion in FY'18) 53.07 5.32 44.04 7.92 37.13 ✓ Cash and Cash Equivalent up by 25.19% y/y (From N1.31billion 5.14 5.75 in FY'18 to N1.64billion in FY'19) 61.85 51.01 45.01 38.29 30.29 1.09 0.61 0.15 1.31 1.64 FY'15 FY'16 FY'17 FY'18 FY'19 Cash and Cash Equivalent Loans & Advances Investment Securities P r es en t a t i o n t o I n v es t o r s & A n a l y s t s – 2 0 1 9 F u l l Y ea r R es u l t s 14
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